The job loss is an improvement from the first three months of 2009, when monthly losses averaged 691,000 jobs, said Joel Prakken, chairman of Macroeconomic Advisers LLC, which prepares the report using ADP payroll data for 585,000 companies. (Click on image for larger view.)

Still, Prakken expects the Bureau of Labor Statistics to up the national unemployment rate to 9% in May from 8.6% in April when it releases its report on Friday. He projects national unemployment will peak at 9.5% to 10% later this year.

A separate jobs report today also indicates the worst of U.S. jobs losses may have passed. Companies announced plans to eliminate 111,182 jobs in May, 16% fewer than April’s announced cuts, reports Challenger Gray & Christmas, an executive search firm. Announced layoffs don’t always occur.

ADP also revised its April job loss figure to 545,000 from its initial 491,000, Prakken said.

Of the May report, he said, “You could argue that at least (job loss) is improving, but this is a weak report. Losses are widespread in all industries and size of business.”

Cuts by size of business:

209,000 jobs at firms with fewer than 50 employees

223,000 jobs at businesses with 40 to 499 employees

100,000 jobs at companies with 500+ employees

Cuts by type of business:

267,000 jobs at goods-producing companies

165,000 jobs at service businesses

“Employment lags behind (gross domestic product) growth by several months,” Prakken said, noting that GDP fell substantially in the past two quarters. “Another 1 million to 1.25 million will be eliminated even if the recession formally ends in the second quarter.”

A number of economic indicators are improving which should boost employment eventually, he added,. They include:

Small businesses have lost more than 2 million jobs since their peak employment in January 2008, Prakken noted. “In the early throes of recession, small businesses were doing better job of holding onto employees than large companies, but after last fall, when it was clear holiday sales would be lower, there was almost a capitulation and their job losses accelerated.”

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